On 19 April 2019, the Prime Minister issued Decision No.
18/2019/QD-TTg on import of used machinery, equipment and
technological lines ("Decision 18"). Decision 18 was
later amended and supplemented by Decision No. 28/2022/QD-TTg of
the Prime Minister on 20 December 2022.
Generally, Decision 18 provides the basic principles for the import
of used machines and technological lines into Vietnam,
including:
(i) detailed definitions on machines and technological lines;
(ii) requirements of used machines and technological lines to be
allowed to be imported into Vietnam;
(iii) procedures for the importation of used machines and
technological lines in Vietnam with detailed provisions on works to
do, timeline and application documents; and
(iv) inspection of used machines and technological lines with
detailed provisions on the inspection certificate (where required)
and eligible organizations to implement inspecting
activities.
WHAT YOU MUST KNOW
1. First thing first, as the requirements and the procedures will
differ between used machines and technological lines, it is
important to identify the type of machine to be imported into
Vietnam. According to Decision 18, while machinery and equipment
are defined as a a complete structure comprised of parts, groups of
parts, and components that are interconnected to operate to serve
the intended purposes, technological line means ystem of machinery,
equipment, tools and/or devices that are installed or
interconnected on a fixed site according to a technological process
or diagram to ensure synchronous operation serving
manufacturing.
In other words, a single machine is treated as "machinery and
equipment" under Decision 18 while technological line means
two or more machines connected together to serve a purpose on a
fixed site according to a technological process or diagram.
2. After the first round of identification, it is important to
decide whether the used machine/technological line meets the
requirements as set out in Decision 18. According to Decision 18,
the main requirements for used machines/technological lines, among
others, are as follows:
(i) Used technological lines:
– Remaining capacity (which is the number of products that
the technological line produce in a given time period) or
performance must achieve at least 85% of its design capacity or
performance.
– The amount of raw materials or energy consumed by the
technological line shall not exceed 15% of its design consumption
level.
(ii) Used machines: Used machines' age must not exceed 10
years. In some specific sectors, the maximum age can be 20 years to
25 years as specified under Decision 18 (as amended).
3. In terms of procedures, provided that the used
machines/technological lines meet all the requirements as set out
in Decision 18, apart from the required import documents under the
Law on Customs, generally, the importer must submit to the
competent customs authority the following additional
documents:
(i) Copy of the latest Enterprise Registration Certificate affixed
with the importer's seal;
(ii) Inspection certificate issued by a duly licensed organization
with the contents as set out in Decision 18;
(iii) Translated and legalized manufacturer's certificate
providing the manufacturing year and manufacturing standards
applied to the used machine in case of the machine being
manufactured in G7 countries or Korea (in case of used
machine).
4. Special cases: In case an importer wishes to import used machine
whose age exceeds the age limit regulated in Decision 18 where
remaining capacity or performance of such a machine achieves 85% or
above of its design capacity or performance, and amount of raw
materials or energy consumed by that machine does not exceed 15% of
its design consumption level to serve its manufacturing in Vietnam.
The importer can seek approval from the Ministry of Science and
Technology (MOST). Such an approval will be later used in the
import documents. It is important to note that, in this case, the
importer must thoroughly explain the necessity of the used machine
to the MOST for the MOST to issue its approval.
WHAT YOU MUST DO
To ensure the compliance with the prevailing regulations on
importation of used machinery, equipment and technological line,
you must:
1. Obtain all information and documents you can about the used
machine/technological line you intend to import, i.e. age,
technology, components, manufacturer, country of origin, use of
such a machine/technological line, and current status. All of these
information must be carefully reviewed and assessed by all relevant
parties before you decide to import such a machine/technological
line;
2. Find your trusted inspection company. As the importation of used
machine/technological line requires inspection certificate from a
duly licensed company, you must find yourself a trusted and duly
licensed company after you have decided that you will go through
with your plan of importing used machine/technological line. It is
worth noting that the list of duly licensed companies is published
at the website of the MOST. However, it is advised that you or your
advisor reach out to these companies first to carefully perform due
diligence on these companies before you decide to go with one since
each of these companies has experience and expertise in different
types of machine/technological line;
3. FIND YOUR TRUSTED LEGAL ADVISOR. A capable legal advisor can
support you from your decision-making phase of the import until you
import your desired used machine/technological line into the border
of Vietnam. Among others, a legal advisor can help you with:
(i) identifying the exact type of your desired
machine/technological line;
(ii) identifying the requirements for such a machine/technological
line;
(iii) along with the inspection partner, assessing the current
conditions of such a machine/technological line and assess the
feasibility of the importation of such a machine/technological
line;
(iv) monitoring your working process with the inspection partner
and support on the legal aspect of such a process;
(v) preparing checklist of required documents and implementing
necessary work with regard to the application documents for the
import (i.e. drafting, reviewing, supporting on the
translation/notarization, etc.); and
(vi) work with relevant parties (i.e. the MOST, the inspection
company, the customs authoritiy) to ensure the compliance of the
import.
From mid-2023 until mid-2024, Duane Morris Vietnam supported a
client with its plan to import a used technological line from
Germany. During this engagement, Duane Morris Vietnam's scope
of work covers the support from legal aspect for the client's
business plan from start to finish, including reviewing and
assessing the technological line, finding the suitable inspection
company and taking care of legal matters between the client and
such company, reviewing documents and application documents related
to the import, providing comprehensive advice to the client with
legal aspect of the import. With Duane Morris Vietnam's
support, the technological line was issued with the appropriate
inspection certificate and was ready to be imported into Vietnam
for the client's business.
***
Please do not hesitate to contact Oliver Massmann under
omassmann@duanemorris.com if you have any questions or want to know
more details on the above. Oliver Massmann is the General Director
of Duane Morris Vietnam LLC.
Thank you!
Disclaimer: This Alert has been prepared and published for informational purposes only and is not offered, nor should be construed, as legal advice. For more information, please see the firm's full disclaimer.
